Canada's Home Capital's deposit balances decline further

Reuters Staff

2 Min Read

TORONTO, May 16 (Reuters) - Canada’s biggest non-bank lender Home Capital Group Inc on Tuesday published data showing that its deposit balances were continuing to decline.

Home Capital has been struggling to finance its assets as its high interest deposit accounts have fallen by 94 percent since March 27, when the company terminated the employment of former Chief Executive Martin Reid.

The withdrawals accelerated after April 19, when Canada’s biggest securities regulator, the Ontario Securities Commission, accused Home Capital of making misleading statements to investors about its mortgage underwriting business. The company has said the accusations are without merit.

Home Capital said its high-interest savings deposit balances stood at C$120.9 million ($88.9 million) on Monday, compared with C$C$125.4 last Friday.

Its cashable guaranteed income certificate deposits (GICs), which holders can redeem before their maturity date, fell to C$160 million on Monday from C$167 million last Friday.

The company last Friday said uncertainty around future funding had cast doubt about whether it could continue as a going concern.

Home Capital relies on deposits from savers and GICs to fund its lending to borrowers, such as self-employed workers or newcomers to Canada, who may not meet the strict criteria of the country’s biggest banks.

The company said it had access to C$1.48 billion in available liquidity and credit capacity on Monday, compared with C$1.51 billion last Friday.